Moody’s sees another tough refining year

Citing forecasts by the US Energy Information Administration, the firm says global demand for gasoline and distillate products will grow only modestly and “will continue to lag the anticipated high available supplies.”

Across North America, Europe, the Middle East, and Africa, the refining industry’s earnings before interest, taxes, depreciation, and amortization (EBITDA) will decline by more than 15% in the next 12-18 months as crack spreads—the differences between crude costs and product values—remain thin, Moody’s predicts in a research note.

“Record gasoline produced from 2015 to mid-2016 amid low crude prices, along with excess inventories, has outpaced gasoline and distillate demand growth from consumers and industrial customers in every major world economy,” the firm says.